How to Buy Real Estate With a Cash Agreement Form in California

A cash purchase agreement has no loan contingency.

Sellers often prefer buyers with cash over financed home buyers. In general, a cash offer on a home involves less time and hassle for the seller and buyer, as they forgo the loan origination process and lender demands. An all-cash buyer in California can protect his interests by using a thorough real estate agreement, such as the Residential Purchase Agreement and Joint Escrow Instructions, developed by the California Association of Realtors. The contract includes a clause for cash buyers as well as contingencies that allow the buyer to investigate the home before buying.

1

Place an offer on the property using the CAR purchase agreement. You may obtain the eight-page form from a real estate agent or download the form online from a real estate-related website. A real estate agent, either your own or the seller's, can assist you in writing the offer. The form acts as the offer until the seller accepts by signing the final page, at which point, the form and any corresponding counter offers and addenda, become the official purchase agreement, or sales contract.

2

Indicate on the contract that you will pay for the home in cash. Bypass most of Section 3 (Finance Terms) on page one, which requires loan information. On parts A and B of Section 3, indicate the earnest money deposit amount, the form of payment upon deposit and the deposit deadline. The deposit acts as a measure of good faith because you may be required to surrender it to the seller if you fail to meet contract terms. You can also increase your deposit amount after a specified period to increase your commitment to the deal. The deposit typically equals 1 percent of the sale price. The escrow agent applies the deposit toward your total balance due at closing.

3

Check the box next to Item 4 of Section H (Loan Terms) on page 2. By checking the box, you indicate that you have no loan contingency; that is, buying the home does not depend on obtaining financing. It also emphasizes that the seller may keep your deposit indicated on page 1 if you fail to pay for the home in cash by the closing deadline.

4

Check the box in Section J ( All Cash Offer) on page 2. Checking this box indicates that you have the necessary funds to close and can present evidence to the seller within seven days. To increase or decrease the 7-day delivery deadline, check the second box in Section J and indicate the number of days for delivery on the line provided next to the box. You may also deliver the verification of funds to the seller along with your offer. You must check the final box in Section J when doing so.

Things You Will Need

Purchase agreement

Tip

You may want to keep the appraisal contingency included in the contract to ensure that the home's value is sufficient. The appraisal is a must on a financed deal; however, you may forgo the appraisal when buying in cash if you do not care whether the home is worth as much as you intend to pay for the house. To remove the contingency from the contract, you must check the box next to Section I (Appraisal Contingency and Removal) on page 2.